UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 12, 2006
ISOLAGEN, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 001-31564 87-0458888
(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
405 Eagleview Boulevard, Exton, Pennsylvania 19341
(Address of Principal Executive Offices) (Zip Code)
(484) 713-6000
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2 (b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4 (c))
Item 1.01 - Entry into a Material Definitive Agreement.
The information required by this item is included in Item 3.03.
Item 3.03 - Material Modification to Rights of Security Holders.
On May 12, 2006, the Board of Directors of Isolagen, Inc. (the "Company")
declared a dividend distribution of one Right for each outstanding share of
common stock, par value $.001 per share, of the Company ("Company Common
Stock") to stockholders of record at the close of business on May 22, 2006
(the "Record Date"). Each Right entitles the registered holder to purchase
from the Company a unit consisting of one ten-thousandth of a share (a "Unit")
of Series C Junior Participating Preferred Stock, par value $0.001 per share
("Preferred Stock"), at a Purchase Price of $35.00 per Unit, subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and American Stock
Transfer & Trust Company, as Rights Agent.
Initially, the Rights will be attached to all Company Common Stock
certificates representing shares then outstanding, and no separate Rights
Certificates will be distributed. Subject to certain exceptions specified in
the Rights Agreement, the Rights will separate from the Company Common Stock
and a Distribution Date will occur upon the earlier of (i) 10 business days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired beneficial ownership
of 15% or more of the outstanding shares of Company Common Stock (20%, in the
case of certain institutional investors) other than as a result of repurchases
of stock by the Company or certain inadvertent actions by institutional or
certain other stockholders (the "Stock Acquisition Date") or (ii) 10 business
days (or such later date as the Board shall determine) following the
commencement of a tender offer or exchange offer that would result in a person
or group becoming an Acquiring Person. Until the Distribution Date, (i) the
Rights will be evidenced by the Company Common Stock certificates and will be
transferred with and only with such Company Common Stock certificates, (ii)
new Company Common Stock certificates issued after the Record Date will
contain a notation incorporating the Rights Agreement by reference and (iii)
the surrender for transfer of any certificates for Company Common Stock
outstanding will also constitute the transfer of the Rights associated with
the Company Common Stock represented by such certificate. Pursuant to the
Rights Agreement, the Company reserves the right to require prior to the
occurrence of a Triggering Event (as defined below) that, upon any exercise of
Rights, a number of Rights be exercised so that only whole shares of Preferred
Stock will be issued.
The Rights are not exercisable until the Distribution Date and will
expire at 5:00 P.M. (New York City time) on May 12, 2016, unless such date is
extended or the Rights are earlier redeemed or exchanged by the Company as
described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Company Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate
Rights Certificates alone will represent the Rights. Except as otherwise
determined by the Board of Directors, only shares of Company Common Stock
issued prior to the Distribution Date will be issued with Rights.
In the event that a Person becomes an Acquiring Person, each holder of a
Right will thereafter have the right to receive, upon exercise, Company Common
Stock (or, in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times the exercise price of the Right.
Notwithstanding any of the foregoing, following the occurrence of the event
set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person will be null and void. However, Rights are not
exercisable following the occurrence of the event set forth above until such
time as the Rights are no longer redeemable by the Company as set forth below.
For example, at an exercise price of $35.00 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following an
event set forth in the preceding paragraph would entitle its holder to
purchase $70.00 worth of Company Common Stock (or other consideration, as
noted above) for $35.00. Assuming that the Company Common Stock had a per
share value of $10.00 at such time, the holder of each valid Right would be
entitled to purchase 7 shares of Company Common Stock for $35.00.
In the event that, at any time following the Stock Acquisition Date, (i)
the Company engages in a merger or other business combination transaction in
which the Company is not the surviving corporation, (ii) the Company engages
in a merger or other business combination transaction in which the Company is
the surviving corporation and the Company Common Stock is changed or
exchanged, or (iii) 50% or more of the Company's assets, cash flow or earning
power is sold or transferred, each holder of a Right (except Rights which have
previously been voided as set forth above) shall thereafter have the right to
receive, upon exercise, common stock of the acquiring company having a value
equal to two times the exercise price of the Right. The events set forth in
this paragraph and in the second preceding paragraph are referred to as the
"Triggering Events."
At any time after a person becomes an Acquiring Person and prior to the
acquisition by such person or group of fifty percent (50%) or more of the
outstanding Company Common Stock, the Board may exchange the Rights (other
than Rights owned by such person or group which have become void), in whole or
in part, at an exchange ratio of one share of Company Common Stock, or one
ten-thousandth of a share of Preferred Stock (or of a share of a class or
series of the Company's preferred stock having equivalent rights, preferences
and privileges), per Right (subject to adjustment).
The Purchase Price payable, and the number of Units of Preferred Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a
stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) if holders of the Preferred Stock are granted certain
rights or warrants to subscribe for Preferred Stock or convertible securities
at less than the current market price of the Preferred Stock, or (iii) upon
the distribution to holders of the Preferred Stock of evidences of
indebtedness or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Units will be issued and, in lieu thereof, an adjustment
in cash will be made based on the market price of the Preferred Stock on the
last trading date prior to the date of exercise.
At any time until ten business days following the Stock Acquisition Date,
the Company may redeem the Rights in whole, but not in part, at a price of
$0.001 per Right (payable in cash, Company Common Stock or other consideration
deemed appropriate by the Board of Directors). The aggregate redemption price
otherwise payable to a beneficial holder of Rights shall be rounded to the
nearest $0.01, provided, however, if such aggregate redemption price is less
than $0.01, such holder will be entitled to receive $0.01 upon the redemption
of such Rights. Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the redemption price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the event that
the Rights become exercisable for Company Common Stock (or other
consideration) or for common stock of the acquiring company or in the event of
the redemption of the Rights as set forth above.
Any of the provisions of the Rights Agreement may be amended by the Board
of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by
the Board in order to cure any ambiguity, to make changes which do not
adversely affect the interests of holders of Rights, or to shorten or lengthen
any time period under the Rights Agreement. The foregoing notwithstanding, no
amendment may be made to the Rights Agreement at a time when the Rights are
not redeemable, except to cure any ambiguity or correct or supplement any
provision contained in the Rights Agreement which may be defective or
inconsistent with any other provision therein.
The holder of each share of Company Common Stock outstanding at the close
of business on May 22, 2006 will receive one Right. So long as the Rights are
attached to the Company Common Stock, one additional Right (as such number may
be adjusted pursuant to the provisions of the Rights Agreement) shall be
deemed to be delivered for each share of Company Common Stock issued or
transferred by the Company in the future. In addition, following the
Distribution Date and prior to the expiration or redemption of the Rights, the
Company may issue Rights when it issues Company Common Stock only if the Board
deems it to be necessary or appropriate, or in connection with the issuance of
shares of Company Common Stock pursuant to the exercise of stock options or
under employee plans or upon the exercise, conversion or exchange of certain
securities of the Company. 10,000 shares of Preferred Stock are initially
reserved for issuance upon exercise of the Rights.
The Rights may have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
in a manner which causes the Rights to become exercisable. The Rights,
however, should not affect any prospective offeror willing to make an offer at
a price that is fair and otherwise in the best interest of the Company and its
stockholders. The Rights should not interfere with any merger or other
business combination approved by the Board since the Board may, at its option,
at any time until ten business days following the Stock Acquisition Date
redeem the then outstanding Rights at the Redemption Price or take other
action to exempt such a transaction under the Rights Agreement.
The Rights Agreement, dated as of May 12, 2006, between the Company and
American Stock Transfer & Trust Company as Rights Agent, specifying the terms
of the Rights is attached hereto as Exhibit 4.1 and is incorporated herein by
reference. The foregoing description of the Rights is qualified in its
entirety by reference to such exhibit.
On May 15, 2006, the Company issued a press release announcing the
approval and implementation of the Rights Agreement. A copy of the press
release is filed as Exhibit 99.1.
Item 9.01 - Financial Statements and Exhibits.
(c) Exhibits.
Exhibit No. Description
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4.1 Rights Agreement, dated as of May 12, 2006, by and between
the registrant and American Stock Transfer & Trust
Company, including the Form of Certificate of Designation,
Preferences and Rights of Series C Junior Participating
Preferred Stock attached as Exhibit A thereto, the Form of
Rights Certificate attached as Exhibit B thereto and the
Summary of Rights to Purchase Preferred Stock attached as
Exhibit C thereto.
99.1 Press Release dated May 15, 2006.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ISOLAGEN, INC.
(Registrant)
Date: May 15, 2006 By: /s/ Todd Greenspan
--------------------------------
Name: Todd Greenspan
Title: Vice President of Finance
EXHIBIT INDEX
Exhibit No. Description
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4.1 Rights Agreement, dated as of May 12, 2006, by and between
the registrant and American Stock Transfer & Trust
Company, including the Form of Certificate of Designation,
Preferences and Rights of Series C Junior Participating
Preferred Stock attached as Exhibit A thereto, the Form of
Rights Certificate attached as Exhibit B thereto and the
Summary of Rights to Purchase Preferred Stock attached as
Exhibit C thereto.
99.1 Press Release dated May 15, 2006.